Market Report: Centrica excites traders with plan to add phones to growing services list

THE GAS company Centrica piped a new hot rumour into the market yesterday with talk of a joint venture with telecom group Energis.

According to the gossip, the two companies are in talks over a project to use Energis's cable network and know-how to supply telephone services to Centrica's 15 million customers. The deal, which could be announced with the utility's interims tomorrow, will mark another stage in Centrica's metamorphosis from boring gas peddler to swish service provider.

Millions of customers can already buy their gas, electricity, credit cards and phone bills from the former British Gas offshoot. The almost certain acquisition of the Automobile Association, due to be approved in the next few weeks, will add road recovery to Centrica's sprawling empire and boost its customer database by another 9.5 million names.

A telephone deal with Energis could be the ideal way to provide these hungry consumers with a "household services one-stop shop" and move away from the low-margin, cyclical gas business.

Unfortunately, the news leak was not enough to push Centrica and Energis higher. The gas group finished 1p lower at 169.5p after hitting an all- time high on Monday, while the telecom company dropped 16p to 1,645p on a sector-wide sell-off. Its 51 per cent shareholder National Grid lost 1p to 413p.

An Energis/Centrica phone combo could prove a powerful rival for BT. The stock yesterday rang up a 34p loss to 952p on growing fears that the buyout of mobile phone operator Cellnet from partner Securicor, down 4.5p to 590p, could face opposition from the security group's shareholders.

Cellnet's rival Vodafone AirTouch shed 28p to 1,262p as optimism over a tie-up with US rival Bell started to fade.

Remaining blue-chips had nothing to phone home about. The FTSE 100 closed 66.2 points lower at 6,309.5 after a nervous session dominated by interest- rate fears on both sides of the pond. The start of the Bank of England's meeting, which today will decide on rates, focused traders' minds on the possibility of a near-term domestic hike.

At the same time a weak opening on Wall Street - despite news of a $80bn megamerger between media powerhouses CBS and Viacom - highlighted US investors' worries over their own monetary policy.

The midcap was also wobbly, ending its record-breaking run with a 19.8- point fall to 6,153.4. The Small Cap was once again the notable exception, rising 6 to an all-time high of 2,859.1 - its 17th consecutive winning close.

The drinks group Allied Domecq, up 8.5p to a record 367.5p, was prominent on the market's bid menu. The stocks soared for most of the day in huge volume before running into mild profit-taking as news that the top management of France's Pernod Ricard was in town revived takeover talk. The Canadian group Seagram, or even UK giant Diageo, up 9p at 629.5p, are two other potential bidders.

Sector peer Bass frothed 15p higher to 840p on talk of further deals after the purchase of Allied's pubs in tandem with Punch Taverns.

Media stocks were excited by the CBS-Viacom deal. TV group Carlton Communications surged 14.5p to 488.5p on hopes that the new US giant could acquire it in an effort to boost its UK presence. A Warburg push also helped. ONdigital partner Granada jumped 9p to 580.5p on similar whispers.

Carlton's jump could be enough to avoid relegation from the FTSE 100 after today's review. However, magazine publisher EMAP is set to drop out despite yesterday's 25p rise to 1056p on a Morgan Stanley "strong buy" upgrade and talk of interest from CBS-Viacom.

Relegation fears also grounded aerospace engineer Smiths Industries, down 37p to 933p. South African insurer Old Mutual, odds-on to enter the FTSE 100, slipped 1.5p after uninspiring maiden interims.

Banks were also active. Barclays firmed 14p to 1,844p on revived talk of a bid from US giant Citigroup, while NatWest cashed in a 22p rise to 1,156p as HSBC and Teather & Greenwood issued the first positive notes on the acquisition of Legal & General, up 0.25p to 202.25p amid continued talk of a counterbid.

Retailers Sainsbury, 12.75p lower to 433.25p, and Tesco, down 5.75p to 191.25p, were savaged by rumours of a bearish note from Merrill Lynch. The heavyweight US broker believes the two could be undone by a forthcoming price war.

Morrison Supermarkets, up 4.5p to 152.25p and Iceland, 21.5p better at 310p after good results, should do better.

Cleaning giant Rentokil Initial mopped up a 0.5p rise to 260.25p on whispers of a share buyback or a major buy such as Securicor or fire and locks specialist Williams. The latter dropped 31.5p to 345.5p after lukewarm results. However, most of the damage was done by the decision by shareholder Baille Gifford to dump its near 5-per-cent stake. The Scottish fund manager asked DKB to place over 30 million Williams shares at a cut-price 345p after being disappointed by the lack of news over a bid by US rival Tyco.

Mining group Billiton fell 0.25p on poor figures despite admitting bid approaches. Anglo American, up 41p to 3,507p on hopes of good results today, and Rio Tinto, down 14p at 1,145p, are two potential bidders.

Midcapper Medeva jumped 9p to 131.5p on renewed talk of a bid or a management buyout. British Biotech shot 4.25p higher to 41.5p after clinching a cancer drug deal worth up to pounds 36m with US drug giant Schering-Plough, while Peptide Therapeutics rose 5.5p to 48.5p on hopes of forthcoming good numbers and vague bid rumours.

Lara Croft game-maker Eidos rose a stunning 396p to 3,616p after Goldman Sachs slapped a 5,320p target on the stock.

Plant hire minnow Multi Equipment Rental climbed 2p to 25.75p after high- profile investor Jim Slater bought a 3.28 per cent stake. Border TV firmed 2.5p to 528.5p on hopes of a good annual statement today.

Recruiter HW Group soared 16.5p to 95p after unveiling a bid approach. Rival Lorien, down 4p to 107.5p, could reveal some corporate action. However, troubled credit-card security group Card Clear plunged 8p to 37p on bad figures.

SEAQ VOLUME: 800 million

SEAQ TRADES: n/a

GILTS INDEX: n/a

THE PRINTER and publisher, Goodhead, is attracting some speculative interest amid talk of a bid from millionaire chairman John Madejski. Followers of the Oxfordshire-based group believe Mr Madejski, the owner of Reading Football Club, is lining up an offer north of 60p for the 34.4 per cent stake in the company he does not own.

Goodhead shares rose 13.5p to 45.5p after the company more than doubled interim profits. Expected broker upgrades could provide further upside.

RUMOURS of high-profile arrivals supported two minnows. Ofex-traded video-conferencing specialist Motion Media surged 5p to 85p on talk that Colin Blackbourn had bought a stake of more than 3 per cent. The investor is said to be confident that Motion Media's innovative technology will help it win major contracts.

Water engineer Hydro International pumped 4p higher to 32.5p on rumours that James Dyson of the eponymous vacuum cleaner may join the board.

Start your day with The Independent, sign up for daily news emails
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm tomorrow
Arts and Entertainment
James May, Jeremy Clarkson and Richard Hammond in the Top Gear Patagonia Special
tv
News
Claudia Winkleman and co-host Tess Daly at the Strictly Come Dancing final
people
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
PROMOTED VIDEO
News
news
News
Elton John and David Furnish will marry on 21 December 2014
peopleSinger posts pictures of nuptials throughout the day
Sport
SPORT
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
Arts and Entertainment
J Jefferson Farjeon at home in 1953
booksBooksellers say readers are turning away from modern thrillers and back to golden age of crime writing
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick